S&P at all time high .. Changing your Asset Allocation? More Bull run? Wait & see ?

[RobbieB]

Yeah, I was down 800 grand and now I'm rich again.

Maybe it is time to sell for cash and buy hard on the next covid dip.

 

[WhenIsItTime]

My recommendation is to sell those stocks high, and pick up some real estate in very nice places where white-collar people can work remotely using Zoom conference calls on their laptops or desktops. I do feel stocks are overvalued right now, and real-estate is supposed to be good against inflation, which may come quickly as a way to get out of the governments COVID deficit mess. But, office real-estate may crumble now that people realize they don't need offices, and houses that have value because of favourable commutes may tumble for the same reason. Rather than living in urban neighbourhoods and commuting to fancy offices, white collar people are going to want live in the prettiest, most pleasant places, whose values are driven by amenities (views, recreation, a music scene after COVID is beat, kids activities, etc.)

I already have 1/3 of my NW in such real estate. I'm now happy with this allocation, but not brave enough to go further into the same. I'm now recommending this AA to others, whereas before COVID I wouldn't.

For myself, if I was to shift my AA I believe the smart move would be to sell my primary residence, and buy a rental property in one of these sweet locations where the white-collar flight will end up. I'd leave my stocks alone.

I have no interest in more RE then my two houses, but curious to understand more. Is this a short term play (essentially flip) or long term (rent)?

What about when companies realize productivity/engagement is down due overuse of remote? I don’t deny the trend, but I don’t think it’s sustainable at current levels.

 

[jimbee]

This market makes absolutely no sense to me right now, so I'm going to make my signature move: nothing.

Amazing how that has always worked out better than what I was thinking of doing.

That's been my personal experience.

 

[SecondCor521]

Maybe it is time to sell for cash and buy hard on the next covid dip.

Assuming there is one.

I know many on this board think it is inevitable and I understand the reasoning behind that conclusion.

However, I am agnostic on the matter. I think it is possible that we have another covid dip, but I also think it is possible that we do not.

If we do not, it will put those of us who accumulated cash for the anticipated sale in an uncomfortable spot.

(My plan is as previously stated on this thread. Basically "stay the course" with a very tiny bit of contrarian buying, which I usually do too early on the way down.)

 

[Dash man]

Assuming there is one.



I know many on this board think it is inevitable and I understand the reasoning behind that conclusion.



However, I am agnostic on the matter. I think it is possible that we have another covid dip, but I also think it is possible that we do not.



If we do not, it will put those of us who accumulated cash for the anticipated sale in an uncomfortable spot.



(My plan is as previously stated on this thread. Basically "stay the course" with a very tiny bit of contrarian buying, which I usually do too early on the way down.)

There will always be another dip. The question is will it go below what the market levels are now or not. Do I took some off the table yesterday and will use it to buy back in some day. I still have plenty in the market, so I will enjoy any rise it may or may not have.

 

[donheff]

Assuming there is one.

I know many on this board think it is inevitable and I understand the reasoning behind that conclusion.

However, I am agnostic on the matter. I think it is possible that we have another covid dip, but I also think it is possible that we do not.

If we do not, it will put those of us who accumulated cash for the anticipated sale in an uncomfortable spot.

(My plan is as previously stated on this thread. Basically "stay the course" with a very tiny bit of contrarian buying, which I usually do too early on the way down.)

This is why I am standing pat now. The first plummet took place when I was already starting to increases my equities so I did 2Cor's last mistake - I bought a little too soon. It still worked out well but not through my brilliant market timing. Now I suspect we may get another big drop and am tempted to sell a bit and get ready to pounce but...maybe not, that drop may not materialize until some other shock drops us a year or three from now.. The prudent (if unexciting approach) is to follow the vested wisdom from this board and sit tight for now. If we get a drop, buy up to my AA (probably to soon) and eventually ride the next bump up until I have to rebalance down.

 

[DrRoy]

This market makes absolutely no sense to me right now, so I'm going to make my signature move: nothing.

Amazing how that has always worked out better than what I was thinking of doing.

My signature move too. If I had done anything, it would have been wrong. The only move I made was to do some Roth conversion on the way down in March.

 

[Mo Money]

My only response to this roller coaster is to rebalance more often than my usual once per year. Since retiring five years ago, my 80/20 portfolio has returned about 11%. So I am content.

 

[skipro33]

I'm at 72/28 invested vs cash. The invested is all equity index fund. I have a pension that covers my living expenses and I draw my SS for everything else that makes life worth living, so this money can just ride. The cash continues to grow about $20K a year due to under spending my income of pension and SS. I started taking SS at the earliest date possible even though I didn't need it and now ending up just banking most of it. Turned out alright, I was diagnosed with cancer yesterday. Sometimes you win one, sometimes you lose one.

 

[Chuckanut]

No changes here. My AA is where I want it for now.
Most of my stocks are in non tax sheltered accounts, so selling will cause a rather large tax hit.

 

[OldShooter]

This market makes absolutely no sense to me right now, so I'm going to make my signature move: nothing.

Amazing how that has always worked out better than what I was thinking of doing.

We can debate Warren Buffett's championship status in investing but IMO he is unquestionably world champion of pithy investment advice:

"Much success can be attributed to inactivity. Most investors cannot resist the temptation to constantly buy and sell. ... Lethargy bordering on sloth should remain the cornerstone of an investment style."
​

 

[VanWinkle]

I'm at 72/28 invested vs cash. The invested is all equity index fund. I have a pension that covers my living expenses and I draw my SS for everything else that makes life worth living, so this money can just ride. The cash continues to grow about $20K a year due to under spending my income of pension and SS. I started taking SS at the earliest date possible even though I didn't need it and now ending up just banking most of it. Turned out alright, I was diagnosed with cancer yesterday. Sometimes you win one, sometimes you lose one.

Sorry to hear of your diagnosis skipro33, but I hope all goes well in your treatment and you enjoy a long retirement.

VW

 

[SecondCor521]

Sorry to hear of your diagnosis skipro33, but I hope all goes well in your treatment and you enjoy a long retirement.

VW

Ditto.

 

[mickeyd]

RTM generally helps me re-balance throughout the year. I assumed that this "swoosh" would happen, though I did not know when it would occur.

 

[cyber888]

I'm at 72/28 invested vs cash. The invested is all equity index fund. I have a pension that covers my living expenses and I draw my SS for everything else that makes life worth living, so this money can just ride. The cash continues to grow about $20K a year due to under spending my income of pension and SS. I started taking SS at the earliest date possible even though I didn't need it and now ending up just banking most of it. Turned out alright, I was diagnosed with cancer yesterday. Sometimes you win one, sometimes you lose one.

Sorry to hear that. You can use tons of your money to beat cancer .... good diet, good medicine, good doctors .. don't put a limit on curing it. ..good luck.

 

[NW-Bound]

We can debate Warren Buffett's championship status in investing but IMO he is unquestionably world champion of pithy investment advice:

"Much success can be attributed to inactivity. Most investors cannot resist the temptation to constantly buy and sell. ... Lethargy bordering on sloth should remain the cornerstone of an investment style."
​

Yet, Buffett is only not an indexer, but a quite active investor at times. He has no qualm about liquidating all of his airline holdings, and sold out much of his energy ones too as I recall.

I think his above message is this: "Don't try this at home. Don't you amateurs try what I as an expert can do". Or rather, he prefers buy/hold, but when he deems the condition is right, he does not hesitate to pull the trigger. And it's not a single-shot pistol that he pulls the trigger of, but a machine gun.

Now, Buffett knows tremendously more about finance and investment than I do (while I know infinitely more about some arcane subjects that do not make much money). Hence, I never disregard what Buffett says or does.

By the way, it is reported that he recently bought a bit of a gold miner. Yes, he bought not into gold which he despised, but gold mining. And the gold miner he bought has a P/E of about 11. Now, that interests me too.

 

[NW-Bound]

I'm at 72/28 invested vs cash. The invested is all equity index fund. I have a pension that covers my living expenses and I draw my SS for everything else that makes life worth living, so this money can just ride. The cash continues to grow about $20K a year due to under spending my income of pension and SS. I started taking SS at the earliest date possible even though I didn't need it and now ending up just banking most of it. Turned out alright, I was diagnosed with cancer yesterday. Sometimes you win one, sometimes you lose one.

Darn! Sorry to hear that.

People beat cancer all the time, depending on what it is.

Good luck to you in your course of treatment.


PS. I was faced with a life-threatening disease 7 years ago. After a few surgeries and treatment, I am still posting here.

 

[OldShooter]

Yet, Buffett is only not an indexer, but a quite active investor at times. He has no qualm about liquidating all of his airline holdings, and sold out much of his energy ones too as I recall.

I think his above message is this: "Don't try this at home. Don't you amateurs try what I as an expert can do". Or rather, he prefers buy/hold, but when he deems the condition is right, he does not hesitate to pull the trigger. And it's not a single-shot pistol that he pulls the trigger of, but a machine gun.

Now, Buffett knows tremendously more about finance and investment than I do (while I know infinitely more about some arcane subjects that do not make much money). Hence, I never disregard what Buffett says or does.

By the way, it is reported that he recently bought a bit of a gold miner. Yes, he bought not into gold which he despised, but gold mining. And the gold miner he bought has a P/E of about 11. Now, that interests me too.

I recommend that people interested in Buffett read the two extant bios. He studied at Ben Graham's knee and eventually made a large amount of his money as a very active and aggressive manager of businesses -- not as the simple stock picker that most people now perceive. In fact, I think it's possible that his time (and Ben Graham's time) have now passed. IIRC it's been ten years since Buffett beat his benchmark.

Shortly before he died, Graham was interviewed by Financial Analysts Journal and said: " ... I am no longer an advocate of elaborate techniques of security analysis in order to find superior value opportunities. This was a rewarding activity, say, 40 years ago, when our textbook "Graham and Dodd" was first published; but the situation has changed a great deal since then. In the old days any well-trained security analyst could do a good professional job of selecting undervalued issues through detailed studies; but in the light of the enormous amount of research now being carried on, I doubt whether in most cases such extensive efforts will generate sufficiently superior selections to justify their cost. To that very limited extent I'm on the side of the 'efficient market' school of thought now generally accepted by the professors."

 

[NW-Bound]

Shortly before he died, Graham was interviewed by Financial Analysts Journal and said: " ... I am no longer an advocate of elaborate techniques of security analysis in order to find superior value opportunities. This was a rewarding activity, say, 40 years ago, when our textbook "Graham and Dodd" was first published; but the situation has changed a great deal since then. In the old days any well-trained security analyst could do a good professional job of selecting undervalued issues through detailed studies; but in the light of the enormous amount of research now being carried on, I doubt whether in most cases such extensive efforts will generate sufficiently superior selections to justify their cost. To that very limited extent I'm on the side of the 'efficient market' school of thought now generally accepted by the professors."

Graham's concession is interesting. And Buffett might have admitted to that much, not now but quite a few years ago, when he said he looked for good deals but could not find anything.

However, Buffett's recent moves are not about looking for overlooked value stocks. He was predicting how the future will unfold and trying to front-run it. Of course only time will tell if he is right, but I find his judgment call more interesting than that of some obscure financial columnists you see on the Web all the time.

 

[Golden sunsets]

I'm at 72/28 invested vs cash. The invested is all equity index fund. I have a pension that covers my living expenses and I draw my SS for everything else that makes life worth living, so this money can just ride. The cash continues to grow about $20K a year due to under spending my income of pension and SS. I started taking SS at the earliest date possible even though I didn't need it and now ending up just banking most of it. Turned out alright, I was diagnosed with cancer yesterday. Sometimes you win one, sometimes you lose one.

Skipro; So sorry to hear this. Prayers that your journey through this health crisis is smooth, quick and successful.

 

[Dtail]

I'm at 72/28 invested vs cash. The invested is all equity index fund. I have a pension that covers my living expenses and I draw my SS for everything else that makes life worth living, so this money can just ride. The cash continues to grow about $20K a year due to under spending my income of pension and SS. I started taking SS at the earliest date possible even though I didn't need it and now ending up just banking most of it. Turned out alright, I was diagnosed with cancer yesterday. Sometimes you win one, sometimes you lose one.

Sorry to hear. I hope you beat it and have a long retirement.

 

[kgtest]

Still 99% equities but recently above my 55% threshold of Large caps due to AAPL now comprising 15% of the folio between individual holdings and ETFs. I may have to rebalance after election.

 

[mickeyd]

Why would I disregard my IPS (45/45/10) that was established years ago and continues to serve me well in both bull and bear environments? Stay the course since I have won the game.

 

[RobLJ]

Should the market run another 3% that probably will bring me back up to 46% stocks and I'll probably shave off another 2%.
I am looking at adding to European and Asian funds since I suspect their economic/COVID recoveries are preceding the US's. Of course given the Fed and other factors, that may not make any difference to markets--but that does seem to offer more value. Small cap and some value also are priced more reasonable, but you could say that for the last decade.

 

[nwsteve]

Fidelity just posted what I found an interesting analysis of the market's new highs by Jurrien Timmer who find to be one of their better analysts. https://www.fidelity.com/learning-c...tors/stock-market-highs?ccsource=email_weekly
One of his more interesting comments was:
"While the SPX gained 0.8% to close at a new all-time high, every single sector in the US stock market had more decliners than advancers last week. All 11 sectors, even tech.
How rare is this occurrence? Extremely rare. In fact, since 1998 it has only happened 4 times.
Last week's return of +0.8% was the highest return since 1998 when this condition was met. Normally when all 11 sectors are in the red, the SPX return would be around −3%. One for the record books"
He goes on to say, while really rare, the outcomes after the previous are mixed with half the time market goes up and half the time down.